Professional Documents
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Department of Public Works and Highways: Office of The Secretary
Department of Public Works and Highways: Office of The Secretary
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OCT 052012
DEPARTMENT ORDER
NO.
72
SUBJECT:
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The following policies, rules and procedures relative to the preparation of the
"Approved Budget for the Contract" (ABC) previously prescribed under Department
Order No. 29, Series of 2011. are hereby revised/reiterated.
The ABC shall be prepared on the basis of the design for the project which
has been duly approved by authorized officials in accordance with existing
regulations.
All items of work to be used in preparing the ABC shall conform to the
Standard Specifications for Highways and Bridges, revised 2004, Standard
Specifications for Public Works, 1995, and approved Special Specifications for the
project.
The ABC shall be composed of the Direct Cost and the Indirect Cost.
A. The Direct Cost shall consist of the following:
A. 1 Cost of materials to be used in doing the work item called for, which
shall include, inter alia, the following:
A. 1.1 Cost at source, including processing, crushing, stockpiling,
loading, royalties, local taxes, construction and/or
maintenance of haul roads, etc.
A. 1.2
A.1.3
Handling expenses.
A.1.4
Storage expenses.
A.2.2
A.3.2
B.1.4
B.1.5
Financing Cost.
(a) Premium on Bid Security
(b) Premium on Performance Security
(c) Premium on Surety for Advance Payment
(d) Premium on Warranty Bond (one year)
B.6.2
B.7 The following non-civil works items shall not be subjected to OCM
mark-up:
B.7.1
B.7.2
8.7.3
8. 7.4
Photographs
B.7.5
B.7.6
Traffic Management
8.7.7
Environmental Compliance
B.7.8
Equipment,
Survey
ESTIMATED
DIRECT COST (EDC)
~--------~I
OCM
(% OF EDC)
I Up to P5Million
I Above P5M up to P50M
INDIRECT COST
% FOR
OCM AND PROFIT
PROF!T
(% OF EDC)
I
I
I
TOTAL
INDIRECT COST
% FOR
OeM AND PROFIT
Above P150M
II'
I
I
12
10
22
17
I!
15
I
I
i
1
14
0.2
Column (5) is the EDC of the work item as calculated and reflected in
the cost analysis prepared by the Estimator.
0.3
Columns (6) and (7) are the mark-ups in percent for OCM and profit.
0.4
Column (8) is the total mark-up, which is the sum of the percentages
under columns (6) and (7).
0.5
0.6
0.7
Column (11) is the total estimated Indirect Cost which is the sum of
columns (9) and (10).
0.8
Column (12) is the total estimated Total Cost or the sum of columns
(5) and (11).
0.9
Column (13) is the unit cost for each item of works, determined by
dividing the estimated Total Cost in column (12) by its total quantity in
column (3).
0.10 Columns (1) thru (5) shall be filled up by the Implementing Office
The officials who will finally approve the ABC (Le., District Engineer/Regional
Director/Undersecretary/Secretary)
may also cause revisions on these estimates as
part of the judicious exercise of their authority.
Since the ABC is to be compared with the Contractor's bid and is the ceiling
for acceptable bid prices in accordance with the provision of R.A. 9184, the ABC
should be based on the approved Bidding Documents for the contract which contain
the same work items and quantities as those to be used by the contractors in
preparing their bid.
DPWH estimators shall continuously update their information/statistics on
market prices of all construction inputs and use only unit prices that are realistic
based on valid up-to-date information, in contrast to guesswork and haphazard
pricing. All assumptions in generating the estimate should be shown in the cost
analysis.
In all cases, estimates for special items of work (SPL) should be accompanied
with plans and specifications, methods of construction, measurements and payments
duly approved by the head of the Implementing Office.
All Department Orders, circulars, memoranda and other issuances, or
portions thereof that are inconsistent with this Department Order are hereby revoked
or amended accordingly.
This Department Order shall take effect immediately.
ELiO L. SINGSON
Secretary
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